Home Depot Expected to Report Q1 Profit Slowdown
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 47 minutes ago
0mins
Should l Buy HD?
Source: seekingalpha
- Profit Expectations Decline: Home Depot is expected to report Q1 EPS of $3.41, reflecting a 4.2% year-over-year decrease, indicating a potential slowdown in profitability that may affect investor confidence.
- Revenue Growth Weakness: While revenue is projected at $41.51 billion, a 4.1% year-over-year increase, analysts' cautious outlook is evident from the lack of upward revisions in EPS estimates, with 22 downward adjustments noted in the past three months.
- Same-Store Sales Growth Slow: Same-store sales are expected to grow close to 1%, with analyst Luca Socci suggesting that a figure above 2% could significantly shift market sentiment, though he remains skeptical, indicating weak market demand.
- Gross and Operating Margins: Gross margin is anticipated to be around 33%, with operating margins projected between 12.8% and 13%, as analysts focus on FY26 guidance, particularly regarding comparable sales metrics to assess spring renovation demand.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy HD?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on HD
Wall Street analysts forecast HD stock price to rise
23 Analyst Rating
17 Buy
5 Hold
1 Sell
Moderate Buy
Current: 297.510
Low
320.00
Averages
401.47
High
441.00
Current: 297.510
Low
320.00
Averages
401.47
High
441.00
About HD
The Home Depot, Inc. is a home improvement retailer. It offers its customers an assortment of home improvement products, building materials, lawn and garden products, decor products, and facilities maintenance, repair, and operations (MRO) products, in stores and online. It also provides a number of services, including home improvement installation services, and tool and equipment rental. It operates over 2,359 stores located throughout the U.S. (including the Commonwealth of Puerto Rico and the territories of the U.S. Virgin Islands and Guam), Canada, and Mexico. Its stores average over 104,000 square feet of enclosed space, with over 24,000 additional square feet of outside garden area. It also maintains a network of distribution and fulfillment centers, as well as mobile applications and e-commerce websites in the U.S., Canada, and Mexico. It serves two primary customer groups, including both do-it-yourself (DIY) and do-it-for-me (DIFM) customers and professional customers (Pros).
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Home Depot to Release Q1 Earnings on May 19
- Earnings Release Announcement: Home Depot is set to release its Q1 earnings on May 19, with analysts projecting earnings of $3.41 per share and revenue of $41.54 billion, indicating significant market interest in its performance.
- Market Reaction: On May 14, Home Depot's stock fell by 2.3%, reflecting investor caution ahead of the earnings report, possibly due to concerns about the economic environment's impact on retail.
- Earnings Expectations Analysis: The analysts' earnings expectations show a shift compared to the previous year, suggesting a divergence in market sentiment regarding Home Depot's profitability in the current economic climate, which could affect investor confidence.
- Industry Trend Impact: Home Depot's earnings report will serve as a critical performance benchmark for the entire retail sector, especially against the backdrop of inflation and supply chain challenges, potentially influencing the stock performance of other retailers.
See More
Home Depot Expected to Report Q1 Profit Slowdown
- Profit Expectations Decline: Home Depot is expected to report Q1 EPS of $3.41, reflecting a 4.2% year-over-year decrease, indicating a potential slowdown in profitability that may affect investor confidence.
- Revenue Growth Weakness: While revenue is projected at $41.51 billion, a 4.1% year-over-year increase, analysts' cautious outlook is evident from the lack of upward revisions in EPS estimates, with 22 downward adjustments noted in the past three months.
- Same-Store Sales Growth Slow: Same-store sales are expected to grow close to 1%, with analyst Luca Socci suggesting that a figure above 2% could significantly shift market sentiment, though he remains skeptical, indicating weak market demand.
- Gross and Operating Margins: Gross margin is anticipated to be around 33%, with operating margins projected between 12.8% and 13%, as analysts focus on FY26 guidance, particularly regarding comparable sales metrics to assess spring renovation demand.
See More
Key Highlights from Monday's Investing Club Meeting
- Software Stocks Surge: On Monday, investors rotated back into software stocks, with Salesforce and ServiceNow rising approximately 3% and 6.5%, respectively, indicating strong performance in the software sector while AI hardware and data center stocks pulled back, reflecting a shift in market themes.
- Opportunity in TJX: TJX Companies' stock pulled back about 10% from recent highs, and Jim sees this as a buying opportunity, especially as consumers become more price-conscious amid inflation, potentially benefiting TJX as struggling retailers look to clear excess inventory.
- Challenges for Home Depot: Home Depot is set to report earnings, with its stock down roughly 8.5% this month; Jim noted that while broader housing market concerns weigh on its performance, the company's fundamentals remain strong, suggesting resilience in its upcoming report.
- Market Snapshot: Stocks mentioned in Monday's rapid-fire segment included Intel, Nextera, Berkshire Hathaway, and Salesforce, highlighting a focus on diversified investments, with Jim's Investing Club maintaining long positions in these stocks.
See More
Market Dynamics and Investment Strategy Analysis
- Weak Economic Data from China: April retail sales in China hit a 40-month low, with industrial output and investment growth also missing expectations, potentially prompting the government to consider aggressive stimulus measures to counteract economic slowdown pressures.
- Salesforce Rating Downgrade: Bank of America downgraded Salesforce from hold to sell with a price target of $160, expressing concerns over customer growth and monetization pathways, indicating a need for an AI-driven structural reset to tackle market challenges.
- NextEra Energy Acquisition: NextEra Energy's acquisition of Dominion Energy aims to create the world's largest regulated electric utility, strategically positioning itself to meet the insatiable electricity demand driven by AI advancements in the future energy market.
- CrowdStrike Price Target Increase: KeyBanc raised CrowdStrike's price target from $525 to $700, highlighting that increasing cybersecurity vulnerabilities are driving companies to boost their spending on security measures, thereby enhancing CrowdStrike's market outlook.
See More
Trump Warns Iran of Possible Conflict Resurgence
- Oil Price Surge: Trump's social media comments urging Iran to 'get moving' have led to a spike in oil prices overnight, raising concerns about a potential resurgence of conflict that could destabilize global energy markets.
- Market Volatility: Following Trump's remarks, stock futures have fallen, setting Wall Street up for another day of significant losses, highlighting the direct impact of political factors on market sentiment.
- Delta Air Lines Investment: Berkshire Hathaway's announcement of a $2.6 billion stake in Delta Air Lines, making it the company's 14th largest holding, reflects confidence in the airline industry's recovery and may drive Delta's stock price higher.
- Meta Layoff Plans: Meta is expected to lay off about 10% of its workforce this week, amidst widespread layoffs in the tech sector, which could dampen employee morale and underscores the company's urgent need for cost control.
See More
Trump Warns Iran Amid Rising Tensions
- Oil Price Surge: Trump's statement urging Iran to 'get moving' has led to a sharp increase in oil prices overnight, raising concerns that the conflict could reignite, which may impact global energy markets and investor confidence.
- Market Volatility: Following Trump's comments, stock futures fell, setting Wall Street up for potentially significant losses again, despite the S&P 500 managing to achieve its seventh consecutive winning week, indicating market fragility.
- Delta Airlines Stock Rise: Delta Airlines shares rose over 2% before the bell after Berkshire Hathaway revealed a $2.6 billion stake in the carrier, marking a return to the airline sector and potentially boosting market confidence in airline stocks.
- Lululemon's Shareholder Pressure: Lululemon's letter to shareholders criticized founder Chip Wilson's outdated views, which could derail the company's turnaround plan, urging shareholders to support its strategy at the upcoming annual meeting, highlighting the urgency of corporate governance issues.
See More
Home Depot to Release Q1 Earnings on May 19
- Earnings Release Announcement: Home Depot is set to release its Q1 earnings on May 19, with analysts projecting earnings of $3.41 per share and revenue of $41.54 billion, indicating significant market interest in its performance.
- Market Reaction: On May 14, Home Depot's stock fell by 2.3%, reflecting investor caution ahead of the earnings report, possibly due to concerns about the economic environment's impact on retail.
- Earnings Expectations Analysis: The analysts' earnings expectations show a shift compared to the previous year, suggesting a divergence in market sentiment regarding Home Depot's profitability in the current economic climate, which could affect investor confidence.
- Industry Trend Impact: Home Depot's earnings report will serve as a critical performance benchmark for the entire retail sector, especially against the backdrop of inflation and supply chain challenges, potentially influencing the stock performance of other retailers.
See More
Home Depot Expected to Report Q1 Profit Slowdown
- Profit Expectations Decline: Home Depot is expected to report Q1 EPS of $3.41, reflecting a 4.2% year-over-year decrease, indicating a potential slowdown in profitability that may affect investor confidence.
- Revenue Growth Weakness: While revenue is projected at $41.51 billion, a 4.1% year-over-year increase, analysts' cautious outlook is evident from the lack of upward revisions in EPS estimates, with 22 downward adjustments noted in the past three months.
- Same-Store Sales Growth Slow: Same-store sales are expected to grow close to 1%, with analyst Luca Socci suggesting that a figure above 2% could significantly shift market sentiment, though he remains skeptical, indicating weak market demand.
- Gross and Operating Margins: Gross margin is anticipated to be around 33%, with operating margins projected between 12.8% and 13%, as analysts focus on FY26 guidance, particularly regarding comparable sales metrics to assess spring renovation demand.
See More
Key Highlights from Monday's Investing Club Meeting
- Software Stocks Surge: On Monday, investors rotated back into software stocks, with Salesforce and ServiceNow rising approximately 3% and 6.5%, respectively, indicating strong performance in the software sector while AI hardware and data center stocks pulled back, reflecting a shift in market themes.
- Opportunity in TJX: TJX Companies' stock pulled back about 10% from recent highs, and Jim sees this as a buying opportunity, especially as consumers become more price-conscious amid inflation, potentially benefiting TJX as struggling retailers look to clear excess inventory.
- Challenges for Home Depot: Home Depot is set to report earnings, with its stock down roughly 8.5% this month; Jim noted that while broader housing market concerns weigh on its performance, the company's fundamentals remain strong, suggesting resilience in its upcoming report.
- Market Snapshot: Stocks mentioned in Monday's rapid-fire segment included Intel, Nextera, Berkshire Hathaway, and Salesforce, highlighting a focus on diversified investments, with Jim's Investing Club maintaining long positions in these stocks.
See More
Market Dynamics and Investment Strategy Analysis
- Weak Economic Data from China: April retail sales in China hit a 40-month low, with industrial output and investment growth also missing expectations, potentially prompting the government to consider aggressive stimulus measures to counteract economic slowdown pressures.
- Salesforce Rating Downgrade: Bank of America downgraded Salesforce from hold to sell with a price target of $160, expressing concerns over customer growth and monetization pathways, indicating a need for an AI-driven structural reset to tackle market challenges.
- NextEra Energy Acquisition: NextEra Energy's acquisition of Dominion Energy aims to create the world's largest regulated electric utility, strategically positioning itself to meet the insatiable electricity demand driven by AI advancements in the future energy market.
- CrowdStrike Price Target Increase: KeyBanc raised CrowdStrike's price target from $525 to $700, highlighting that increasing cybersecurity vulnerabilities are driving companies to boost their spending on security measures, thereby enhancing CrowdStrike's market outlook.
See More
Trump Warns Iran of Possible Conflict Resurgence
- Oil Price Surge: Trump's social media comments urging Iran to 'get moving' have led to a spike in oil prices overnight, raising concerns about a potential resurgence of conflict that could destabilize global energy markets.
- Market Volatility: Following Trump's remarks, stock futures have fallen, setting Wall Street up for another day of significant losses, highlighting the direct impact of political factors on market sentiment.
- Delta Air Lines Investment: Berkshire Hathaway's announcement of a $2.6 billion stake in Delta Air Lines, making it the company's 14th largest holding, reflects confidence in the airline industry's recovery and may drive Delta's stock price higher.
- Meta Layoff Plans: Meta is expected to lay off about 10% of its workforce this week, amidst widespread layoffs in the tech sector, which could dampen employee morale and underscores the company's urgent need for cost control.
See More
Trump Warns Iran Amid Rising Tensions
- Oil Price Surge: Trump's statement urging Iran to 'get moving' has led to a sharp increase in oil prices overnight, raising concerns that the conflict could reignite, which may impact global energy markets and investor confidence.
- Market Volatility: Following Trump's comments, stock futures fell, setting Wall Street up for potentially significant losses again, despite the S&P 500 managing to achieve its seventh consecutive winning week, indicating market fragility.
- Delta Airlines Stock Rise: Delta Airlines shares rose over 2% before the bell after Berkshire Hathaway revealed a $2.6 billion stake in the carrier, marking a return to the airline sector and potentially boosting market confidence in airline stocks.
- Lululemon's Shareholder Pressure: Lululemon's letter to shareholders criticized founder Chip Wilson's outdated views, which could derail the company's turnaround plan, urging shareholders to support its strategy at the upcoming annual meeting, highlighting the urgency of corporate governance issues.
See More
